UK Inflation at 3-Year Low, Indexes Rise

Arthi Gupta
16 Oct, 2012
New York City

The UK indexes gained after inflation eased to a three-year low in September. Rio Tinto third quarter global iron ore production rose 5% to 67 million tons. Bodycote acquired U.S.-based Carolina Commercial Heat Treating for $68 million.

[R]4:00 PM London – The UK indexes gained after inflation eased to a three-year low in September. Rio Tinto third quarter global iron ore production rose 5% to 67 million tons. Bodycote acquired U.S.-based Carolina Commercial Heat Treating for $68 million.[/R]

The UK indexes gained on upbeat global economic data and corporate earnings and the rising expectations that the euro zone leaders are closer to agreeing on loan terms for Greece and Spain is actively participating in wider bailout negotiations.

In the UK domestic economic data, inflation eased and output price index rose in September.

In London, the benchmark index FTSE 100 gained 71.62 or 1.2% to 5,877.57 and the pound edged higher to $1.6129.

UK Inflation Eases

The UK’s annual consumer price inflation eased to 2.2% in September, from 2.5% in August, data published by the Office for National Statistics showed. Inflation is moving closer to the central bank''s 2% target.

On a monthly basis, consumer prices climbed 0.4% in September, from the 0.5% increase in August.

Retail price annual inflation eased to 2.6% in September from 2.9% in August.

Separately, output price inflation in the UK rose in September, data released by the Office for National Statistics showed today.

The output price index for home sales of manufactured products rose 2.5% annually in September compared to a rise of 2.3% in August.

On a monthly basis, the price index rose 0.5% in September.

Total input price index fell 1.2% annually in September compared with a rise of 1.1% last month. Between August and September, the total input price index fell 0.2% compared with a rise of 1.9% between July and August.

Gainers & Losers

Bodycote PLC surged 3.7% to 357.80 pence after the thermal processing services provider acquired U.S.-based Carolina Commercial Heat Treating from Bluewater Thermal Solutions LLC for $68 million.

Petropavlovsk PLC soared 3.1% to 440 pence after the gold producer reported third quarter gold production was 219,400 ounces, 39% higher than the previous quarter and is on track to achieve full year production target of at least 700,000 ounces of gold.

Rentokil Initial plc gained 1.5% to 88.20 pence after the business services provider repurchased €14.5 million principal of its existing € 500 million 4.625% bonds due March 2014 at market price.

Rio Tinto Plc rose 1.7% to $49.19 after the miner said global iron ore production for the third quarter advanced 5% from last year to 67 million tons with Rio Tinto share of production amounting to 53 million tons.

Pilbara iron ore production rose 5% compared to the prior year to 63 million tons and Rio Tinto''s share was 50 million tons.